Daqo reduces losses in Q3 2013, moves forward with polysilicon capacity expansion

Daqo polysilicon project groundbreaking
Daqo has been expanding its polysilicon capacity in Xinjiang on a nearly continuous basis for years (Daqo New Energy)

Polysilicon maker Daqo New Energy Corp. (Chongqing, China) has released results for the third quarter of 2013, reporting a 40% year-over-year increase in revenues to USD 29.6 million, a -17% operating margin and a net loss of USD 11.0 million.

This is a big improvement in operating margin on both a sequential and year-over-year basis, on polysilicon shipments well above the company's guidance. Daqo's is also beginning preparatory work to more than double its polysilicon capacity at its Xinjiang facility to 12,000 metric tons annually.

“In the third quarter of 2013, due to strong demands from our downstream customers, the actual shipment of polysilicon exceeded our original guidance by 29%,” said Daqo CEO Dr. Gongda Yao. “The shipment in the third quarter included 191 MT decrease in inventory balance.”

“We have already booked out all of our remaining capacity through the end of the year. In September, we signed long-term agreements with three Chinese leading wafer manufacturers with the contracted volume accounted for over 70% of our current capacity from Xinjiang facilities.”

High level of shipments to be maintained in Q4 2013

During the quarter, Daqo shipped 1,288 metric tons of polysilicon, as well as 7.5 million silicon wafers and 6.6 metric tons of multi-crystalline silicon blocks. The company reports that it has reduced its production cost for polysilicon to USD 15.16 per kilogram.

In the fourth quarter of 2013, Daqo expects to ship another 12,000 metric tons of polysilicon, as well as 13.5 million wafers.

Expansions to reduce polysilicon production cost

Daqo is in the final stage of a plan to expand its Xinjiang polysilicon facility to 6,150 metric tons annually, and expects to begin trial production by the end of November 2013. At the close of the trial run, the company expects to bring its total production cost to USD 14 per kilogram.

Work has already begun on the 12,000 metric ton expansion, and Daqo plans for the project to come online by the end of 2014. When fully ramped up, the company expects to further reduce its polysilicon production cost to USD 12 per kg.



2013-11-22 | Courtesy: Daqo New Energy | © Heindl Server GmbH

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